Net Metering Under Attack Again

May 18, 2020

3 min read

Well folks, it just wouldn’t be spring if there wasn’t some sort of attack on net metering. Sad, but certainly true these last few year. This time the threat is at a national level with the FERC (the Federal Energy Regulatory Commission). (There’s a link at the bottom to contact your Governor and FERC).

First a little history, it’s important to know that FERC has exclusive jurisdiction over the transmission of electricity for sale or resale.

Next, it’s important to understand 3 things that were determined by FERC in MidAmerica a 2001 case.

FERC determined that if a customer-generator (solar, wind owner etc) was offsetting their consumption or netting their consumption FERC’s jurisdiction didn’t apply if that customer was in a net metering agreement with the utility.

Only if a customer-generator exceeds their offset generation would FERC jurisdiction apply and the customer-generator would be a net generator and thus wholesale pricing would apply not net.

In this case (MidAmerica) it was determined that net metering or retail netting was a billing practice and so long as a customer-generator wasn’t over generating (a net generator) they didn’t fall under FERC Jurisdiction.

Since the MidAmerica case most states have adopted some sort of net metering policy.

The Current Threat to Net Metering

On April 14 a petition was made asking FERC to overturn MidAmerica. This would invalidate all current and future net metering arrangements and wholesale pricing would replace it.

The points below are directly from the VOTE SOLAR Issue Brief that I highly recommend reading if you have a couple minutes (its just a 2-pager).

If FERC grants the petition…

Approximately 2.2 million homes and 100,000 other customers, across 49 states, will see increased electric bills due to the loss of net metering

Existing net metering customers may lose legacy rights granted by state regulators to continue net metering for some period years into the future.

Individuals and small enterprises with net metering systems will be exposed to new tax liabilities, forcing them to pay taxes on the energy they generate for the grid. Currently, netting of exports is not generally considered taxable (see, for example, the South Carolina Department of Revenue Ruling 10-10).

State public utility commissions and a range of stakeholders across the country could be required to convene resource intensive technical investigations to determine avoided costs – a major burden and distraction for state governments that are already facing an ongoing pandemic an economic crisis.

Status quo in the state-federal jurisdictional divide for energy policy and regulation would be disrupted. State legislatures and utility commissions would lose policy flexibility to design retail distributed generation and distributed energy resource programs, potentially hampering ongoing utility grid modernization efforts and many other programs administered by states.

What can you?

This link will allow you to send an email to your Governor and the Federal Energy Regulatory Commission. It only takes a minute so please express your support for solar and net metering today!